In many nonprofits, the accountant is seen as the one who "does the books." But a skilled accountant is far more than a record-keeper, they are a key partner in creating clarity, accountability, and trust within your organization.
You may have in-house staff, a fractional accountant, or a trusted financial consultant; the role of your accountant is central to how your finances are understood and communicated.
Here’s how a good accountant actively supports financial transparency:
1. Clear and Timely Financial Reporting
An accountant ensures that financial reports are not just accurate, they’re also accessible. This means creating monthly reports that are consistent, formatted clearly, and available to board members and leadership in a timely manner. No surprises at year-end.
Transparency Tip: Ask your accountant to include a short narrative or summary with each report that explains key changes or trends in plain language.
2. Proper Allocation of Funds
Transparency starts with tracking funds correctly. Your accountant should help ensure that restricted and unrestricted funds are properly recorded, grants are tracked by project or purpose, and donor designations are honored.
Why it matters: Misallocated funds don’t just raise red flags with donors, they can jeopardize compliance.
3. Budget Development & Communication
Accountants play a vital role in crafting the annual budget and helping departments understand it. But transparency also means helping non-financial staff grasp what the numbers mean. A great accountant can translate financial concepts into mission-relevant language.
4. Internal Controls & Fraud Prevention
An often-overlooked part of transparency is risk management. Your accountant helps implement internal controls that prevent fraud, safeguard donor funds, and ensure that no one person has too much financial power.
Trust is built when donors and boards know that checks and balances are in place.
5. Educating the Board & Staff
Many board members aren’t finance experts, and that’s okay. A transparent accountant makes time to educate and empower leadership to read financials, ask questions, and make informed decisions.
Transparency thrives in a culture where financial literacy is encouraged, not gatekept.
6. Support with Audits, the 990, and Public Disclosures
Your accountant should help your nonprofit prepare for audits and ensure that your Form 990 is accurate, timely, and tells your financial story well. These public-facing reports are essential tools for demonstrating transparency to funders and watchdogs alike.
In Summary:
Financial transparency is a team effort, but your accountant is your guide. They don’t just manage your numbers. They bring structure, insight, and integrity to your organization’s financial voice.
At Anchor Hill Accounting, we’re passionate about helping small and mid-sized nonprofits not only stay compliant, but communicate their financial story with confidence and clarity.
Let’s build trust, together.